Eight Executives Arrested on Charges of Conspiring
to Rig Bids, Fix Prices, and Allocate Markets for
Sales of Marine Hose

WASHINGTON — Eight executives from the United Kingdom (U.K.), France, Italy,
and Japan were arrested today in Houston and San Francisco and charged for
their role in a conspiracy to rig bids, fix prices, and allocate markets for
United States sales of marine hose used to transport oil, the Department of
Justice announced today.

A criminal complaint was unsealed today in U.S. District Court in Miami,
against four executives: Peter Whittle, owner of the U.K.-based consulting
firm PW Consulting (Oil & Marine) Ltd.; Bryan Allison, managing director, and
David Brammar, sales and marketing director, both of the U.K. company Dunlop
Oil & Marine Ltd.; and Jacques Cognard, the oil and marine manager of
Trelleborg Industrie S.A. in France.

A separate criminal complaint was filed late last night in U.S. District Court
in Ft. Lauderdale, Fla. against four executives: Christian Caleca, the
president of the Industrial Hose Business Unit of Trelleborg Industrie S.A. in
France; Vanni Scodeggio, a business unit manager at Parker ITR slr in Italy;
Francesco Scaglia, a product manager at Manuli Rubber Industries SpA in Italy;
and Misao Hioki, an executive involved in the sale of marine hose for
Bridgestone Corporation in Japan. According to the criminal complaints, the
charged executives participated in the conspiracy at various times during the
period from at least 1999 to the present.

Simultaneous with today’s arrests, agents of the Defense Criminal Investigative
Service (DCIS) of the Department of Defense’s Office of Inspector General
executed search warrants at locations across the U.S. While those searches
were being conducted, competition authorities abroad, the Office of Fair
Trading in the U.K. and the European Commission, executed search warrants in
Europe.

“Today’s arrests, combined with the raids in the U.S. and Europe, demonstrate
our ability to work effectively with foreign competition authorities to shut
down international cartels,” said Thomas O. Barnett, Assistant Attorney General
in charge of the Department’s Antitrust Division. “The Antitrust Division will
hold accountable executives who engage in illegal cartels, the supreme evil of
antitrust.”

Marine hose is a flexible rubber hose used to transport oil between tankers and
storage facilities and buoys. Marine hose is purchased by companies such as
Shell, Exxon, and Chevron that are involved in the off-shore extraction and
transportation of petroleum products. It is also purchased and used by the
Department of Defense. Court papers allege that during the conspiracy the
conspirators sold hundreds of millions of dollars worth of marine hose and
related products.

According to the affidavit filed in support of the criminal complaint charging
Whittle, Allison, Brammar and Cognard, the conspirators met in locations such
as Key Largo, Fla., Bangkok, and London. At these meetings, the conspirators
discussed and agreed to the rules for implementing their bid-rigging,
price-fixing and allocation scheme. They also allegedly kept agendas and
detailed “minutes” of cartel meetings.

Also, according to that same affidavit, during the conspiracy the participants
devised code names to conceal their involvement and communications. In written
communications, the conspirators allegedly referred to the cartel as “the club”
or the “Technical Committee – Marine Hose.”

According to court papers, Whittle, the coordinator of the scheme, collected
approximately $300,000 a year, with each conspirator paying him about $50,000.
The conspiring manufacturers allegedly provided Whittle with information about
upcoming marine hose jobs, and Whittle then designated which conspirator would
win the job, referring to the winning conspirator as the “champion.”

The affidavit filed in support of the complaint charging Caleca, Scodeggio,
Scaglia and Hioki alleges that members of the cartel met as recently as
yesterday for the purpose of carrying out the conspiracy. The Justice
Department said that yesterday’s meeting took place in a hotel in Houston.
“Price fixing and bid rigging are serious crimes that drain resources from the
Department of Defense (DOD) and the American taxpayer. The Defense Criminal
Investigative Service (DCIS) takes very seriously all violations of U.S.
antitrust laws that affect products and services procured for our soldiers,
sailors, airmen and Marines. DCIS aggressively investigates those who seek to
cheat DOD and the public by conspiring to suppress competition,” said Charles
W. Beardall, Director, DCIS.

The ongoing investigation is being conducted by the Antitrust Division’s
National Criminal Enforcement Section, the DCIS of the DOD’s Office of
Inspector General, the U.S. Navy Criminal Investigative Service, and the
Federal Bureau of Investigation.

Anyone with information concerning bid rigging or other anticompetitive conduct
regarding marine hose or related products is urged to call the National Criminal
Enforcement Section of the Antitrust Division at 202-307-6694, or the Mission
Viejo Office of the Defense Criminal Investigative Service at 949-643-4191.